High-level group issues report on future of industrial relations

The European Commission's high-level group on industrial relations and change issued its report in March 2002. The report highlights the role of the social partners and the social dialogue at all levels in developing the agenda for industrial relations over the coming years.

In its Communication on a new five-year social policy agenda, issued on 28 June 2000 (EU0007266F), the European Commission set out its intention to create a high-level group on industrial relations and managing change. The group, made up of industrial relations and labour and employment experts from around Europe and chaired by Maria João Rodrigues of Portugal, held its first meeting on 9 February 2001 (EU0103200N). It issued its final report at the beginning of March 2002.

The report is divided into six chapters. Following an introduction, the second chapter sets out the main challenges and issues for industrial relations. Chapter three contains an overview of recent changes and chapter four analyses recent trends at European, national, sectoral, regional and local level. Chapter five presents the group's ideas on improving industrial relations at European level and 'benchmarking' its quality. The final chapter describes the group's working methods and further challenges, and outlines key conclusions.

The main challenges

The report identifies a total of six new challenges for industrial relations in Europe, as follows:

• globalisation. This presents new challenges in terms of European social legislation and protection and the relevance of Europe's industrial relations systems. The high-level group notes that a kind of 'coordinated decentralisation' of bargaining has developed in many EU Member States, creating more space for negotiated flexibility;
• Economic and Monetary Union. Industrial relations will have to find a role within the framework of the European single currency and the subsequent shift of economic and monetary responsibility to the European level. Wage convergence should be based on 'catching up' and a convergence of productivity levels. There may also be a demand for wage flexibility if adjustment mechanisms are called for at national level;
• enlargement. The enlarged EU will eventually have at least 27 Member States. As many of the candidate countries are relatively poor and some have recently gone through or are still in a process of transformation, the challenge of how to bridge the development gap with the EU average will be key. Further, the industrial relations experience of candidate countries is extremely varied;
• technological change and the knowledge economy. The range of new technologies now developing and the emergence of a 'knowledge economy' means that there is a need to enhance industrial relations instruments and structures. Mutual exchange of practices at EU level will be a key instrument in disseminating knowledge and experience;
• demographic trends. The key challenges for industrial relations and public policy in this area are ageing, the declining birth rate and immigration. On the issue of ageing, a positive approach to 'active ageing' should be developed – in particular, more efforts should be made to retain older workers in the labour market; and
• changes in the labour market. Significant changes are taking place, including demand from employers for a more flexible, skilled and specialised workforce and demand from employees for more participation, choice and flexibility in the organisation of working life.

Improving the role of industrial relations

The report states that the European dimension of industrial relations can play an active part in enhancing industrial relations at local, regional and national levels. It highlights three issues which must be addressed in order to improve the European dimension: the interaction between European industrial relations and the national and local level; the interaction between bipartite and tripartite processes at European level; and the interaction between the sectoral and intersectoral levels. It lists a number of key recommendations including the following:

• the social partners should continue with their suggestion, contained in a joint declaration (EU0112262F) to the Laeken European Council in December 2001 (EU0201231N), to create a new committee at the highest political level close to the annual spring European Council and to establish a multi-annual work programme;
• the social partners should explore new ways of negotiating agreements by making further use of the Treaty provisions and exploring the possibility of entering into voluntary framework agreements;
• the social partners are invited to put forward proposals for reform of the institutional framework governing the bipartite social dialogue, including proposals to modify the Treaty;
• the social partners should develop their own process adapted to the specificities of industrial relations. This could build on the 'open method of coordination', exchange of experience, 'benchmarking', recommendations, joint opinions and negotiations;
• the new European Monitoring Centre on Change (EMCC) (EU0111237N), based at the European Foundation for the Improvement of Living and Working Conditions, is highlighted as an institution which will help to promote a network of institutions to follow up best practices and promote exchange of experience. A special effort should be made to train and inform national actors on actions, methods and results of the European social dialogue and on industrial relations systems in other EU and candidate countries;
• technical assistance should be provided at European level to help the social partners to develop industrial relations. The report notes that the interaction between the European and national levels is currently the weakest link in industrial relations;
• in order to develop a 'benchmarking' approach to industrial relations, appropriate indicators should be established to measure and assess the quality of industrial relations. These could be built on the relevant Employment Guidelines developed as part of the European employment strategy launched at Luxembourg in 1997 (EU9711168F). The report suggests a number of such indicators; and
• social dialogue and EU-level consultation should be used as a tool to promote successful enlargement and to address the challenges of the post-enlargement years. Enlargement should be mainstreamed into all levels of European social dialogue.

Commentary

This new report sets out very clearly the challenges which industrial relations in Europe must face if they are to develop and make a positive contribution to the future of Europe. The high-level group sees the social partners and the social dialogue as particularly important actors and tools, at EU, national, regional and local levels. It gives support to the suggestions made by the social partners in their recent contribution to the Laeken Council concerning the creation of a bipartite committee and a programme of work spanning the next few years.

Certainly, the next five years are seen as crucial in the development of industrial relations and the social dialogue in Europe, not least due to the fact that enlargement will become a reality and the European economy is likely to continue to change as the influence of factors such as globalisation and the growth of the 'knowledge economy' becomes more widely felt. Thus, the key challenge over the next few years will be the implementation of the strategies and recommendations set out in this report. (Andrea Broughton, IRS)